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Volgvan
3 years ago
9

Wii Brothers, a game manufacturer, has a new idea for an adventure game. It can market the game either as a traditional board ga

me or as an interactive DVD, but not both. Consider the following cash flows of the two mutually exclusive projects for the company. Assume the discount rate is 12 percent.
Year Board Game DVD
0 -$1,200 -$2,700
1 690 1,750
2 950 1,570
3 210 800

Required:
a. What is the payback period for each project?
b. What is the NPV for each project?
c. What is the IRR for each project?
d. What is the incremental IRR?
Business
1 answer:
Tanzania [10]3 years ago
6 0

Answer:

a. Payback period:

Board game:

= Year before payback + Amount left / Cashflow in year of payback

= 1 + (1,200 - 690) / 950

= 1.54 years

Game DVD:

= 1 + (2,700 - 1,750) / 1,570

= 1.61 years

b. NPV

Board Game

= 690 / 1.12 + 950 / 1.12² + 210 / 1.12³ - 1,200

= $322.88

Game DVD

= 1,750 / 1.12 + 1,570 / 1.12² + 800 / 1.12³ - 2,700

= $683.52

c. IRR

Look at attached picture

Board Game IRR = 29%

Game DVD IRR = 28%

d. Incremental IRR

Look at attached picture

= 27%

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$140,000 is the value of the property using the cost approach for a property was originally purchased for $160,000. The land portion is 25% of total value. If depreciation totals $20,000.

If the depreciation totals $20,000 then $160,000-$20,000 = $140,000

The accounting technique of depreciating an asset throughout its useful life is referred to as depreciation. Depreciation is a measure of how much an asset has been used for. By paying for assets over a specific amount of time, it enables businesses to generate income from the ones they possess.

The initial cost of ownership is drastically lowered because businesses are not required to fully account for them in the year the assets are purchased. The profitability of a corporation may suffer significantly if depreciation is not taken into account. For both tax and accounting reasons, businesses can depreciate long-term investments.

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2 years ago
_____ is a strategic-management tool that helps an organization take stock of its internal characteristics and assess the extern
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SWOT is a strategic-management tool that helps an organization take stock of its internal characteristics and assess the external environmental conditions.

<h3>What is SWOT?</h3>

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The purpose of SWOT is to assist identify the internal and external factors that could pose as threats to an organization.

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2 years ago
Consider two markets: the market for coffee and the market for hot cocoa·The initial equilibrium for both markets is the same, t
den301095 [7]

Answer:

The elasticity of supply for hot cocoa is 1.43.

(D) Supply in the market for coffee is less elastic than supply in the market for hot cocoa

Explanation:

Using the midpoint formula,

Elasticity of supply for hot cocoa = (change in quantity supplied/average quantity supplied) ÷ (change in price/average price)

change in quantity supplied = 101 - 31 = 70

average quantity supplied = (101+31)/2 = 66

70/66 = 1.06

change in price = 9.75 - 4.5 = 5.25

average price = (9.75+4.5)/2 = 7.125

5.25/7.125 = 0.74

Elasticity of supply for hot cocoa = 1.06 ÷ 0.74 = 1.43. The supply for hot cocoa is elastic because the elasticity of supply is greater than 1.

Elasticity of supply for coffee = (73 - 31)/(73+31)/2 ÷ 0.74 = 42/52 ÷ 0.74 = 0.81 ÷ 0.74 = 1.09. The supply for coffee is elastic because the elasticity of supply is greater than 1.

However, supply in the market for coffee is less elastic than supply in the market for hot cocoa because the elasticity of supply for coffee is less than that of hot coffee.

7 0
4 years ago
After several years of declining product sales, the online nutrition site NutriShake revamped its marketing strategy. Before thi
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In assessing whether the improvement in product sales can properly be attributed to the marketing strategy change, it would be most helpful to find out Has the number of unique visitors to the NutriShake online site increased substantially in the last two years?

Option B

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Two forms to do that are technically available

(1) You are directly selling to clients on the website

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4 0
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MAXImum [283]

Answer:

Promissory agreement.

Explanation:

A promissory agreement can be defined as an evidence of a debt and as such involves the use of a legal financial tool such as a promissory note as a written promise to declare that a party (borrower) would pay another (lender) at a specific period of time.

Thus, when goods are sold to a customer by a business entity and the customer promises to pay an amount of money at a certain future time period it is known as a promissory agreement.

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